July 28, 2008

The National Security and Defence Council of Ukraine has instructed the cabinet to ensure that the Odessa-Brody oil pipeline should start pumping oil in the originally-planned westward direction by the end of 2008, Oleksandr Shlapak, the first deputy head of the presidential secretariat, has said.

The Interfax-Ukraine news agency at 1351 gmt on 28 July quoted Shlapak as telling a briefing: "The National Security and Defence Council has decided at its meeting that the Cabinet of Ministers must spare no effort to make sure that the oil pipeline should start operating in the originally-planned direction by the end of 2008."

Shlapak added that the cabinet was currently implementing the project in an unsatisfactory manner.

When asked what oil would be pumped via the pipeline, he said: "It will be light oil. Perhaps Caspian oil, or Azerbaijani, or Turkmen."

In recent years, the pipeline has been used in the reverse direction to pump Russian oil to Odessa.

Shlapak also warned that Ukraine was gradually losing its status as an oil transit state, Interfax-Ukraine reported at 1403 gmt.

He was quoted as saying that, while it has capacity to transport 67m tons of oil a year, Ukraine "barely pumps" 33m tons.

Noting that Russia was pursuing "an exceptionally aggressive policy in regard to its transit capabilities", Shlapak warned: "If it implements its projects to build a transport network bypassing Ukraine, Russia will be able to do without the transport capabilities of such countries as Ukraine, Poland and Belarus. So Ukraine needs to fundamentally reconsider its role as an energy transit state. We need new ideas, we need new negotiations."